Popularity of Federal Spending Will Be Realized in 2011

For years polls have consistently shown that more than a majority of Americans say that no area of federal spending should be cut, with the exception of foreign aid.

The poll findings should be taken as gospel, but politicians have consistently ignored or vehemently denied them. That’s going to change in 2011. The substantial and broad-based support that exists for federal spending will become common wisdom as individuals, businesses, industries, associations, communities, mayors, county executives, governors and even whole regions of the United States fight openly to prevent the spending reductions that Congressional Republicans say they’re going to consider this year.

Ironically, the best example of what’s ahead may well be the military base realignment and closure commissions that so often are held up as paragons of how budget decisions should be made. I’ve said in the past that BRACs are special situations and that their process cannot be easily extrapolated to other budget issues. A BRAC is asked to do one very specific thing: determine which military facilities should be closed after a political decision has already been made that some should be shuttered. That’s very different from the much larger policy questions of whether, when and how the federal deficit should be reduced — the types of questions typically asked of budget commissions like the recently failed Bowles-Simpson panel.

But the BRACs are instructive in this case because the parties that would be negatively affected by a base closure almost always fight like hell to prevent it. Cities, states, communities, businesses and chambers of commerce usually engage lobbyists to make the case that their local base shouldn’t be eliminated. They commission economists to conduct analyses of the effects of the closure on area incomes, unemployment, property values and taxes, as well as anything else that they think will demonstrate that closing their facility is inappropriate and unjustified. They work with public relations agencies to get more attention. They also enlist their Representatives and Senators to oppose the proposed cut on their behalf, and the lawmakers are almost always more than happy to oblige.

A second precedent to consider is the public backlash against the two federal government shutdowns in 1995 and 1996. Initially the disapproval came from individuals, whose amusement and curiosity over the Republicans’ attempts to win concessions from the Clinton administration morphed into anger over the disruption to the federal services that they needed or enjoyed, and it spread to companies that did business with the government or relied on federal activities in some way. The shutdowns proved to be so unpopular that, like the character from the “Harry Potter” series whose name must not be spoken, the word seemed to be banned until recently from serious tactical political discussions.

The same defend-our-federal-spending-to-the-death attitude will arise for almost every cut proposed this year. Given that the financial markets and the overall economy are less robust than in 1995 and 1996 and that local officials and workers will assume that the private sector won’t immediately make up for federal reductions, the fight to prevent the spending cuts is very likely to be far more intense than what has taken place up to now.

Those who support the spending cuts likely will try to deal with this by talking about federal finances rather than local economies. We’ll hear about increased government efficiency, higher productivity, a reduced government workforce and a lower deficit. The clear implications will be that only the government will have to make do with less.

Experience shows that those arguments will only go so far because federal workers don’t only live in Washington, D.C. States have fought vigorously over the years to bring federal facilities into their communities to reap economic benefits, and they will fight at least as hard to keep them, especially given the dire forecasts of lower property values, reduced consumer spending and other repercussions of eliminating these jobs. In other words, it won’t just be the federal workers who will oppose the cuts; it will be the supermarkets, “big box” stores, restaurants, car dealerships, landlords, homeowners and others who will oppose the economic pain they see coming.

All of this means that, by the end of 2011, the popularity of federal spending that pollsters have been reporting may finally become common wisdom in Washington, as it already should have been.

Stan Collender is a partner at Qorvis Communications and founder of the blog Capital Gains and Games. He is also the author of “The Guide to the Federal Budget.”